PEMC slaps P234-M penalty on Therma

The Philippine Electricity Market Corp. (PEMC) has slapped a P234.9 million fine against Therma Mobile Inc., a subsidiary of Aboitiz Power Corp., charging that Therma failed to deliver supply pledged to Manila Electric Co. in the last two months of 2013.

Therma operates the power barges in Navotas. Meralco complained that power generators withheld supply which had led to the spike in prices on the wholesale market, which in turn led Meralco to charge the controversial high rates for January to February 2014.

The PEMC board said that Therma violated the “Must Run” and “Must-Offer” rules of the Wholesale Electricity Spot Market (WESM) Rules.

According to the PEM Board, the penalties will be collected from TMO through the WESM settlement process.

The investigation against TMO stemmed from allegations that it did not operate its power barges during the November and December 2013 supply period.

PEMC initially found that TMO withheld capacity during the period under investigation.

As a result of the Meralco price hike case brought before the Supreme Court (SC), the High Court ordered the Energy Regulatory Commission (ERC) to investigate anti-competitive behavior and abuse of market power allegedly committed by some WESM participants.

Aboitiz Power said that there is no basis for the PEMC decision saying that it followed the rules and delivered all its available capacity to its customer Manila Electric Corp. (Meralco), contrary to the findings of PEMC.

In a statement, Aboitiz Power said it did not withhold any capacity for the period covered, as it was physically impossible for TMO to transmit more than 100 megawatts (MW) to Meralco.

Aboitiz Power said although TMO’s rated capacity is 234 MW (net), it could only safely, reliably and consistently deliver 100 MW during the November and December 2013 supply period because of limitations of its engines and the 115kv transmission line.

“This temporary limitation of TMO’s plant was confirmed during a dependable capacity testing conducted on November 21, 2013,” it added.

At this period, Aboitiz Power said TMO’s engines and transmission lines were still undergoing rehabilitation after having been non-operational for the last five years.

TMO took over the four barge-mounted bunker-fired power-generating facilities in Navotas in November 2013.

TMO President and COO Jovy P. Batiquin said forcing the engines and the 115kv line to produce and deliver more than 100 MW at that time could cause a collapse of the line and could trigger a much-bigger problem for the Luzon grid, he added.

“The financial penalties imposed on TMO will have an adverse effect on the financials of Aboitiz Power Corporation,” said Batiquin.